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    3.the Role of Marketing Channels

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    Swapna Mahendra
    The document discusses marketing channels and channel management. It describes how marketing channels move goods from producers to consumers through forward and backward flows. Channels can have multiple levels with intermediaries like retailers and distributors. Channel design involves analyzing customer needs and service levels, setting objectives, and identifying alternatives like sales forces, agents, and distributors. Managing channels requires selecting, training, motivating, and evaluating channel members. Channels can be integrated vertically through corporate or contractual systems, or horizontally through cooperation between companies. Conflicts can arise within or between channels. E-commerce allows online purchasing, marketing, and transactions through pure-click companies or brick and click companies adding online channels.

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    3.the Role of Marketing Channels

    Uploaded by

    Swapna Mahendra
    12K views4 pages
    The document discusses marketing channels and channel management. It describes how marketing channels move goods from producers to consumers through forward and backward flows. Channels can have multiple levels with intermediaries like retailers and distributors. Channel design involves analyzing customer needs and service levels, setting objectives, and identifying alternatives like sales forces, agents, and distributors. Managing channels requires selecting, training, motivating, and evaluating channel members. Channels can be integrated vertically through corporate or contractual systems, or horizontally through cooperation between companies. Conflicts can arise within or between channels. E-commerce allows online purchasing, marketing, and transactions through pure-click companies or brick and click companies adding online channels.

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    The document discusses marketing channels and channel management. It describes how marketing channels move goods from producers to consumers through forward and backward flows. Channels can have multiple levels with intermediaries like retailers and distributors. Channel design involves analyzing customer needs and service levels, setting objectives, and identifying alternatives like sales forces, agents, and distributors. Managing channels requires selecting, training, motivating, and evaluating channel members. Channels can be integrated vertically through corporate or contractual systems, or horizontally through cooperation between companies. Conflicts can arise within or between channels. E-commerce allows online purchasing, marketing, and transactions through pure-click companies or brick and click companies adding online channels.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    12K views4 pages

    3.the Role of Marketing Channels

    Uploaded by

    Swapna Mahendra
    The document discusses marketing channels and channel management. It describes how marketing channels move goods from producers to consumers through forward and backward flows. Channels can have multiple levels with intermediaries like retailers and distributors. Channel design involves analyzing customer needs and service levels, setting objectives, and identifying alternatives like sales forces, agents, and distributors. Managing channels requires selecting, training, motivating, and evaluating channel members. Channels can be integrated vertically through corporate or contractual systems, or horizontally through cooperation between companies. Conflicts can arise within or between channels. E-commerce allows online purchasing, marketing, and transactions through pure-click companies or brick and click companies adding online channels.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    Download as doc, pdf, or txt
    of 4

    ::: The Role of Marketing Channels

    Channel Functions and Flows


    a marketing channel performs the work of moving goods from producers to consumers.
    Some functions constitute a forward flow of activity from the company to the customer;
    other functions constitute a backward flow from customer to the company. A
    manufacturer selling a physical product and services might require three channels: a sales
    channel, and a service channel.

    Channel levels
    a zero level channel consist of a manufacturer selling directly to the final customer.
    Major examples are door to door sale, mail order.
    A one-level channel contains one selling intermediary; a two-level channel contains two
    selling intermediaries. These intermediates could be retailers, distributors.
    As the no. of levels increase the level of difficulty of information sharing and
    coordination also increase. Channels normally describe a forward movement of products
    from source to user.

    Service Sector Channels


    marketing channels are not limited to the distribution of physical goods. Producer of
    service and ideas also face problem of making their output available and accessible to
    target population.

    ::: Channel-Design Decisions

    analyzing customer’s desired service output levels


    1. Lot size
    2. Waiting and Delivery time
    3. Special convenience
    4. Product variety
    5. Service backup

    Establishing objectives and constraints


    Channel objectives should be stated in terms of targeted service output level. Channel
    objectives vary with product characteristics. Bulky product such as building materials
    requires channels that minimize the shipping distance and the amount of handling.

    Identifying major channel alternatives


    Companies can choose from a wide variety of channels for reaching customers from sales
    forces to agents, distributors, dealers and direct mail. Channel alternative described by 3
    elements: the types of available business intermediaries, the no. of intermediaries needed
    and the terms and responsibilities of each channel member.

    Types of intermediaries: A firm needs to identify the types of intermediaries available


    to carry on in channel work.
    No. of intermediaries: 3 stages are available: exclusive distribution, selective distribution
    and intensive distribution. Exclusive distribution means severally limiting a no. of
    intermediaries. Selective distribution involves the use of more than a few but less than all
    of the intermediaries who are willing to carry a particular of product. Intensive
    distribution consists of the manufacturer placing the goods or services in as many outlets
    as possible.

    Terms and responsibilities of channel members:


    Price policy calls for the producer to establish a price list and schedule of discounts and
    allowance that intermediaries see as an equitable and sufficient.
    Condition of sale refers to payment terms and producer guarantee.
    Mutual service and responsibilities must be carefully spelled out, especially in franchise
    and exclusive agency channels.

    ::: Channel management decisions

    1. Selecting channel members


    Companies need to select their channel members carefully as they represent the company
    to the customer. To facilitate channel members selection, produces should determine
    what characteristics distinguish the better intermediaries, for e.g. the no. of years in
    business, the growth and profit record and financial strength.

    2. Training channel members


    Companies need to plan and implement careful training programs for their intermediaries.

    3. Motivating channel members


    • Coercive power
    • Reward power
    • Legitimate power
    • Expert power
    • Referent power

    4. Evaluating channel members


    5. Modifying channel arrangements

    : Channel Integration and Systems

    Vertical marketing system


    A VMS by contrast, comprises the producer, wholesaler and retailer. Acting as a unified
    system.

    Corporate vs.
    Administered vms: It coordinates successive stages of production and distribution
    through the size and power of one of the member.
    Contractual vms: 1. Wholesaler-sponsored voluntary chains
    2. Retailer cooperatives
    3. Franchise organizations

    Horizontal marketing systems


    In which two or more unrelated companies put together resources on program to exploit
    an emerging marketing opportunity.
    Multichannel marketing systems
    It occurs when single firm uses two or more marketing channels to reach one or more
    customer segments.
    • Planning channel architecture

    ::: Conflict, cooperation, and competition

    Types of conflict and competition


    Vertical channel conflict means a conflict between different levels within the same
    channel.
    Horizontal channel conflict involves a conflict between members at the same level within
    the channel.
    Multi-channel conflict exists when the manufacturer has established two or more channel
    that sell to the same market.

    Causes of channel conflict


    • Goal incompatibility
    • Difference in perception
    • Dependence

    Managing channel conflict


    Co-optation is an effort by one organization to win the support of leaders of another
    organization by including them in advisory council.
    Arbitration occurs when the two parties agree to present their arguments to one or more
    arbitrators and accept the arbitration decision.

    Legal and ethical issues in channel relations


    Many producers likes to develop exclusive channels for their products. Exclusive dealing
    often include exclusive territory agreement. The producer may agree not to sell to other
    dealers in a given area. Producers are free to select their dealers, but their right to
    terminate dealers is somewhat restricted.

    ::: E-commerce marketing practices

    E-commerce means that a company or site offers to transact or facilitate the selling of
    product and service online.
    E-purchasing means companies decide to purchase goods services and information from
    various online suppliers.
    E-marketing described company efforts to inform buyers communicate, promote and sell
    its product and services over the internet.

    Pure-click companies
    There are several kinds of pure-click companies for e.g. search engines, ISP, commerce
    sites.

    Business to Business E-commerce


    The purpose of B2B sites is to make markets more efficient. In B2B buyers get
    information from supplier website, informidiaries, market makers and customer
    communities.

    Brick and Click companies


    Many brick and mortar companies have agonized over whether to add online e-commerce
    channel. Many companies moved quickly to open web site describing their business but
    resisted adding e-commerce to their sites. They felt that selling their products or services
    online would produce channel conflict.

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